The Supreme Court came down heavily on SpiceJet Chairman and Managing Director Ajay Singh on Monday and warned him to send him to Tihar jail for non-compliance with its order on making payment to global investment bank and financial services firm Credit Suisse AG.
A bench of justices told Mr Singh he will have to abide by the consent terms and warned, “We are not bothered even if you die. It is too much. We will send you to Tihar jail, if you do not pay.”
“We have to move to the next drastic step. We are not worried even if you shut down,” a bench of Justices Vikram Nath and Ahsanuddin Amanullah observed.
The court ordered Singh to pay the Swiss company $ 5,00,000 toward an installment as well as the USD 1 million defaulted amount by September 22.
What is SpiceJet-Credit Suisse case?
As per the Swiss firm, SpiceJet used SR Technics, Switzerland, to maintain, repair, and overhaul aircraft engines, modules, components, assemblies, and parts that were essential to its operations.
On November 24, 2011, SpiceJet and SR Technics signed a ten-year deal for these services. Additionally, the payment conditions were agreed upon.
Credit Suisse was granted permission by SR Technics to collect payments from SpiceJet for the services.
On July 25, the Supreme Court extended SpiceJet’s deadline for paying Credit Suisse in accordance with the conditions of the parties’ consent.
The highest court was considering a Swiss company’s request to start contempt proceedings against Singh and SpiceJet for “a wilful and intentional disobedience” of court decisions and for failing to pay dues as agreed upon by the parties.
Singh and SpiceJet were sent with contempt notices on August 14 after the bench took note of the Swiss firm’s argument that the court had spared the airline’s bankruptcy only because of the consent terms dated May 23, 2022, which required payments of USD 500,000 on a monthly basis.
On August 18, 2022, SpiceJet and Credit Suisse informed the Supreme Court about the resolution of their financial disagreement, which caused the low-cost airline to withdraw its appeal against a Madras High Court judgment for its winding up due to alleged non-payment of dues to the Swiss company.
“There is a settlement which has taken place on May 23, 2022, as per the consent terms. In view of it, both the parties are satisfied with the settlement and want to withdraw the SLP (special leave petition) filed by the petitioner.
The court had directed the parties to abide by the consent terms.
After an appeal of SpiceJet, the top court, put a hold on the publication of the winding up notice and the order directing the official liquidator attached to the Madras High Court to take over the assets of the low-cost airline.
Additionally, it had requested SpiceJet to settle the money dispute with the Swiss company.
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